Methodologies for supporting sustainability in energy and buildings. The contribution of Project Economic Evaluation.

The European regulatory framework for building energy performance and international energy policies imply a multidisciplinary approach to sustainability involving disciplines such as Building Physics, Materials Science, Environmental Technology, Real Estate Appraisal and Project Economic Evaluation. The aim of the paper is to take advantage of the contribution of the last, highlighting economic-evaluative approaches involved in regulations and policies supporting sustainability in energy and buildings. Special attention is given to Directive 2010/31/EU (EPBD recast) and following Commission Delegated Regulation (EU) n.244/2012, which require Member States to set minimum energy performance requirements on the cost-optimal level. Furthermore, focus is placed on ISO 14040:2006, ISO 15686:2008 and ISO 21500:2012, respectively on Life Cycle Assessment, Life Cycle Costing and Project Management. Sustainable Design principles and Life Cycle Thinking approach are assumed. Focus is given to environmental and economic sustainability in terms of global performance, assuming energy performance as a proxy for building quality. The study aims to support decision making processes, public authorities in planning activities and in territorial governance, designers, real estate investors, even in the case of complex projects at different territorial scales

Buildings’ energy performance, green attributes and real estate prices: methodological perspectives from the European literature

Buildings’ energy efficiency may affect real estate prices, but the literature suggests that the effects of green attributes and Energy Performance Certificate ratings on the value of residential properties in Europe are still variable across contexts. The adoption of methods able to appropriately investigate this issue is thus essential. In this framework and to support future studies, this paper offers a methodological review of scientific works on the topic published in the last five years. Our work does not only represent an update of other reviews, but it originally analyses the papers by a methodological viewpoint. Results highlight a progressive refinement of the research questions and methods adopted. Then, the increasing importance of concepts such as latent variables and green attributes in the real estate pricing process is detected and identified as a field to be furtherly explored. Finally, Structural Equation Modelling is proposed as a promising approach for future studies

Monitoring and Analysis of the Real Estate Market in a Social Perspective: Results from the Turin’s (Italy) Experience

In Italy, it has always been dicult to collect reliable data on real estate given the opacity of the information available. Keeping into consideration the actual availability of data and information, the possibility to have a structure for permanently monitoring and analysing the real estate market is fundamental. Focusing on developing and disseminating knowledge related to practices in this context, in this paper the Turin’s (Northern Italy) experience is presented, through the Real Estate Market Observatory (TREMO): This structure is based on a data-warehouse, implemented over time, with databases that lead to historic price observations of the residential market. The data warehouse is the basis for investigating methodologies and analyses, assuming the spatial requisites of the data and its georeferencing as the main discriminant in choosing among descriptive statistics, multi-varied or spatial analysis methods. In twenty years, several studies have been developed, allowing us not only to explore the applicability of models and operative modalities, but also to obtain results with a high potential impact under a social viewpoint. In this paper, the methodologies developed for implementing the monitoring structure are presented, specifically the “quality process” and computerized analysis procedures, followed by some representative research experiences with reference to aims, models and results

The Discount Rate in the Evaluation of Project Economic-Environmental Sustainability

The debate about project economic sustainability evaluation from a life cycle perspective focused on the conventional Life Cycle Costing (LCC). Despite the potentialities of the approach for evaluating design options at different scales (building/system/component/material), some limits emerge due to the neoclassical nature of the economic principles on which it is founded. The most important aspect of this debate is the necessity to clarify how to deal with environmental costs in the calculation, particularly in the case of public/PPP interventions. Two research topics emerge for strengthening the capability of LCC to deal with environmental components: (1) the LCC and environmental quantitative analysis (using Life Cycle Assessment) joint application; (2) the integration of the environmental dimension into the microeconomic approach, using appropriate discount rates. As known, these last are particularly relevant for public projects, in which the time value of money issue becomes crucial in presence of long lifespan analyses and economic objectives. Thus, the purpose of this paper is to explore alternative discounting modalities, for identifying the preferable one, towards an “environmental LCC model”. The research domain is therefore on the limits of LCC in dealing with environmental cost components, at the time being poorly studied by the scientific literature: this point represents the missing link which form the basis for the research problem to be addressed. The research design is focused on the investigation of environmental hurdle rate technique and the escalation rate approach, as alternatives to the standard “time preference” (financial) one. The LCC and the global cost are selected as the main tool for the analysis, which is founded on an empirical research methodology. The results, obtained by simulations on a case study (two alternative technological components), confirm the relevance of the discount rate effect on the Global Cost calculation by modelling some of the potential impacts of building components on the environment, e.g., the expectations of technological development over time. By the environmental hurdle rate, the results can even change the final preferability ranking obtained using financial rates. The value of the work consists of growing the debate on the topic and supporting environmentally responsible investment decisions in the building construction sector (new-build/retrofit of existing assets)

A sustainability indicator for building projects in presence of risk/uncertainty over time: a research experience

Aim of the paper is to present the results of a research experience focused on the setting of a sustainability indicator in presence of risk/uncertainty over time. Firstly, a literature review of the most widespread methodologies for the evaluation of project economic sustainability in a life cycle perspective is presented, extrapolating the most relevant research lines; secondly, a four steps research experience is illustrated. The methodology for calculating a stochastic economic-environmental indicator is proposed, by adopting a stochastic Global Cost approach to solve Life Cycle Cost Analysis (LCCA). The input for the analysis are modeled through Probability Distribution Functions, while the durability of components is modeled through the stochastic approach to the Factor Method

EPC Labels and Building Features: Spatial Implications over Housing Prices

The influence of building or dwelling energy performance on the real estate market dynamics and pricing processes is deeply explored, due to the fact that energy efficiency improvement is one of the fundamental reasons for retrofitting the existing housing stock. Nevertheless, the joint effect produced by the building energy performance and the architectural, typological, and physical-technical attributes seems poorly studied. Thus, the aim of this work is to investigate the influence of both energy performance and diverse features on property prices, by performing spatial analyses on a sample of housing properties listed on Turin’s real estate market and on different sub-samples. In particular, Exploratory Spatial Data Analyses (ESDA) statistics, standard hedonic price models (Ordinary Least Squares—OLS) and Spatial Error Models (SEM) are firstly applied on the whole data sample, and then on three different sub-samples: two territorial clusters and a sub-sample representative of the most energy inefficient buildings constructed between 1946 and 1990. Results demonstrate that Energy Performance Certificate (EPC) labels are gaining power in influencing price variations, contrary to the empirical evidence that emerged in some previous studies. Furthermore, the presence of the spatial effects reveals that the impact of energy attributes changes in different sub-markets and thus has to be spatially analysed

Health Technology Management

Non

Economic–Environmental Sustainability in Building Projects: Introducing Risk and Uncertainty in LCCE and LCCA

The aim of this paper is to propose a methodology for supporting decision-making in the design stages of new buildings or in the retrofitting of existing heritages. The focus is on the evaluation of economic–environmental sustainability, considering the presence of risk and uncertainty. An application of risk analysis in conjunction with Life-Cycle Cost Analysis (LCCA) is proposed for selecting the preferable solution between technological options, which represents a recent and poorly explored context of analysis. It is assumed that there is a presence of uncertainty in cost estimating, in terms of the Life-Cycle Cost Estimates (LCCEs) and uncertainty in the technical performance of the life-cycle cost analysis. According to the probability analysis, which was solved through stochastic simulation and the Monte Carlo Method (MCM), risk and uncertainty are modeled as stochastic variables or as “stochastic relevant cost drivers”. Coherently, the economic–financial and energy–environmental sustainability is analyzed through the calculation of a conjoint “economic–environmental indicator”, in terms of the stochastic global cost. A case study of the multifunctional building glass façade project in Northern Italy is proposed. The application demonstrates that introducing flexibility into the input data and the duration of the service lives of components and the economic and environmental behavior of alternative scenarios can lead to opposite results compared to a deterministic analysis. The results give full evidence of the environmental variables’ capacity to significantly perturb the model output

Sustainable Public Procurement in the Building Construction Sector

Considering that in the E.U. public procurement in the construction sector is highly represented, the Directive 2014/24/EU is implemented for harmonizing procurement processes across European countries. The Directive is transposed in Italy, through the Sustainable Public Procurement (SPP) national action plan, for supporting public procurement and public–private partnership (PPP) interventions. SPP is founded on two pillars: according to an economic viewpoint, the financial efficiency is the key aspect to verify, and, according to a sustainability viewpoint, externalities are a key element in the environmental evaluation, despite the fact that their monetary quantification into the global cost calculation is quite complex. Thus, this work aims to explore a methodology for the joint evaluation of economic–environmental sustainability of project options, in the tender evaluation phase of the SPP. The methodology is based on the life cycle costing (LCC) and CO2 emissions joint assessment, including criteria weighting and uncertainty components. Two alternative technologies—a timber and an aluminum window frame—are assumed as a case for a simulation, implemented with the software “Smart SPP LCC-CO2 Tool” (developed through the research “Smart SPP—Innovation through sustainable procurement”, supported by Intelligent Energy Europe). The simulation demonstrates that the methodology is a fast and effective modality for selecting alternative options, introducing sustainability in the decision-making process. The work is a contribution to the growing literature on the topic, and for giving support to subjects (public authorities and private operators) involved in public procurement processes/PPP interventions